Laissez-Faire Capitalism

[Nate T.]

Why does the government not have a choice in making law? There's nothing naturally mandatory in the existence of laws; individuals choose to create laws.

I wasn't sufficiently clear. The government does have choice in what laws it enacts, since these decisions are made by individual people. I did not mean to claim that laws are determined as a matter of physical law or fate; governments (by which I mean their members) choose to enact both good laws and bad laws all the time.

However, the laws they pass have consequences. If the goal of the government in question is to protect individual rights (which is a purpose set down by ethics), then only laws of a certain nature will act to support that end, such as laws prohibiting murder, rape, theft, etc. The fact that a law does not protect individual rights has consequences for those living under the government which passes these laws-- and it is these consequences, measured against the standard of protecting the ability of free, rational individuals to pursue their own happiness (and trade with other such individuals), that determine the propriety of the law in question.

Your mugger's ultimatum fails this test for "good law" because one cannot live and prosper in an environment where one's life and property is in jeopardy; "force and mind are opposites." Governments can pass any laws they want-- but they cannot escape the consequences of these laws on the members of the society they govern. This is parallel to the situation of individuals in ethics, since man is free to act in many different ways, but only certain ways based upon his nature will lead to his flourishing.

Edit: Spelling; Rewording.

Edited January 4, 2009 by Nate T.

[JeffS]

No, LFC wouldn't. Anarchy would.

The reason why that wouldn't be allowed in Capitalism is because it constitutes fraud.

It is not an act of voluntary trade, it is an act of deception.

As a result, it doesn't qualify as part of the economy (which is the system of voluntary trade among individuals). A government which provides laws to prevent theft and fraud would not have to be involved in any way in the economy: the deals and contracts people make voluntarily. That is what is meant by the separation of state and the economy.

I think what you're saying is that once someone commits fraud, that stops being part of the LF economy, therefore a government dealing with someone who breaks the law wouldn't be a government interferring in an LF economy. I can understand this, but it doesn't change the fact that the government's laws exist regardless of whether the economy is LF or not. That is, the very fact that the laws exist constitutes an interference in the market. Laws don't come into existence once someone breaks them, they exist at all times - even when no one is breaking them and the market is operating as LF.

[Jake_Ellison]

I still don't see how this is any different from a mugger's ultimatum. The mugger says, "Do X, or I'll do Y." The government says, "Do X, or we'll do Y." Nothing forces me to comply with the mugger, nothing forces me to comply with the government. If you say, "The mugger is initiating the force by giving you the ultimatum." Why isn't the government initiating force by giving you an ultimatum?

It is not an ultimatum. You are free to do as you wish unless you prevent someone else to be free.

By your logic I can't put up a sign that says "Stay off my property or else." either, because that would constitute an ultimatum against anyone who wishes to come on my property, or murder my children for that matter.

Surely you do see the difference between someone acting to defend individual rights and someone acting to violate those rights?

As far as something forcing you to comply with the mugger, the threat of force obviously does. Also, the threat of law forces you to not violate anyone's rights. The difference is that in the first instance your rights to life, liberty and the pursuit of happiness are being violated.

In the second case, they are not being violated, as long as you respect this system of rights. If you don't, well then by what moral or political principle do you expect to have your rights respected?

P.S. The problem with anarchists, and the libertarian movement in general, is that their ideas don't rest on the foundation of a rational philosophy. Instead, they base everything on principles which come out of thin air. (Or rather are borrowed from philosophers such as Ayn Rand, but without the context in which she meant them, so they are constantly misinterpreted)

For instance, saying that the use of force is wrong is a statement which has no basis. Why is it wrong? Is it wrong when someone is about to kill you? If not, then the statement "the use of force is wrong", without any further context, is false.

Yet, that's what anarchists base their ideas on.

Edited January 4, 2009 by Jake_Ellison

[JeffS]

You misunderstand the difference between initiation and retaliation. LFC laws are not an initiation, they are retalatory in nature. An individual still is free to do as he pleases, but face consequences of his choices. Every choice has a consequence, and not having laws qould not change that fact.

I am also free to do as I please when a mugger mugs me - I can choose to not hand over my wallet. At which point he would kill me. Is this not force? A law may proscribe retalitory action, but its existence is initiative. It says, in effect, "Do X, or I will do Y."

Saying that a laws existence is an initiation of force is the same as saying the idea of right to life and self defense are an initiation of force.

I don't think so. An idea proscribes no consequences for a certain action - a law does. A law promises specific force (a threat, if you will) if some specific action, some specific choice, is not made, or is made. A law is coercion, while an idea is just an idea. Your idea of a right to self-defense might mean you give your wallet, because that would defend your life; or it could mean you pull out your gun and kill your attacker; or it could mean you beg and plead for sympathy.

I've always understood that no one, not even the government had the right to initiate force. By that I mean that the government can only act to retaliate against the initiation of force or to prevent the initiation of force.

There has to be a cause, it is not within the power of the government to initiate force on a whim. That is tyranny.

Then what is the "cause" when we have laws against, for example, murder?

[Jake_Ellison]

I can understand this, but it doesn't change the fact that the government's laws exist regardless of whether the economy is LF or not. That is, the very fact that the laws exist constitutes an interference in the market. Laws don't come into existence once someone breaks them, they exist at all times - even when no one is breaking them and the market is operating as LF.

If the law doesn't prevent participants in the economy to act within the framework of that economy (to make any voluntary deals they wish to make), then that law does not involve the government into the economy. How does such a law interfere with the behaviour of anyone who is out to make deals?

While I predict that I'd have no problem proving that LFC in fact means a separation of state and economics, no matter what challenges you bring, I don't think it is constructive to go down this road any further, because in Objectivism the operating principle as far as politics is concerned is in fact not "separation of state and economics".

It is instead the principle of individual rights. While "the separation of state and economics" is a logical consequence of that principle, individual rights are what Ayn Rand derived from her ethics, and it is from that principle that she reached the conclusion that Laissez-faire Cap. is the only moral political system.

Edited January 4, 2009 by Jake_Ellison

[DavidOdden]

Imagine a society with no laws. Everyone in the society acts as if there is a law against murder, even though there is not.

But both assumptions are false. Respect for individual rights does not come out of thin air, it is the fruit of developing a civilization. The concept "society" implies laws and recognizes the fact that some men live like animals. Those are the initiators of force, and rational men have created societies in response to this savagery where further initiation of force is prohibited by law. You are seeking first causes, well here is his picture and here is his gang. Laws protecting rights in response to such threats, which as you have noted is not initiation of force.

Recall that fact trumps imagination any day: law is necessitated by fact, not imaginary scenario.

[Nate T.]

I second Jake's suggestion that there may be a libertarian/anarchist "Force = Bad" premise operating here. It's not true that the use of force is unequivocably bad in all circumstances; it depends upon the purposes of its use. Here, the threat of the government to use force in response to a murder is more akin to self-defense against the mugger: both are in service of protecting individual rights. It is this, and not semantic issues about what constitutes "initiating" force, that is important in deciding when the use of force is justified.

[JeffS]

It is not an ultimatum. You are free to do as you wish unless you prevent someone else to be free.

By your logic I can't put up a sign that says "Stay off my property or else." either, because that would constitute an ultimatum against anyone who wishes to come on my property, or murder my children for that matter.

Surely you do see the difference between someone acting of defend individual rights and acting to violate those rights?

Putting up a sign in your yard isn't self-defense - it's a threat, or if you prefer, it's a warning. Much like a law.

As far as something forcing you to comply with the mugger, the threat of force obviously does. Also, the threat of law forces you to not violate anyone's rights. The difference is that in the first instance your rights to life, liberty and the pursuit of happiness are being violated.

In the second case, they are not being violated, as long as you respect this system of rights. If you don't, well then by what moral or political principle do you expect to have your rights respected?

I could just as easily argue my rights aren't being violated in the first case as long as I respect the mugger's system of rights. What the government is saying is, "As long as you follow the law, we'll respect your rights to life, liberty, and the pursuit of happiness." The mugger is saying the same thing, "As long as you obey me, I'll respect your right to live."

I'm not concerned with whether laws are rational, what individual rights are, whether they are arrived at rationally or not - because I don't see how these questions apply to the question I'm concerned with: How can law not be an initiation of force?

[DavidOdden]

Laws don't come into existence once someone breaks them, they exist at all times - even when no one is breaking them and the market is operating as LF.

The first statement is true, the second is false. Laws are not naturally occurring objects like rocks and bananas. Moral principles are man-made -- they are the recognition of man's proper nature in a social context. Without a recognition of the fact, there is no law.

[JeffS]

I wasn't sufficiently clear. The government does have choice in what laws it enacts, since these decisions are made by individual people.

Okay, government can make "good" laws and "bad" laws. How would any law not be an initiation of force in the form of coercion?

[Jake_Ellison]

I am also free to do as I please when a mugger mugs me - I can choose to not hand over my wallet. At which point he would kill me. Is this not force? A law may proscribe retalitory action, but its existence is initiative. It says, in effect, "Do X, or I will do Y."

You are not free to do as you please when being mugged. You in fact have two coices:

1. to die

2. to comply with what the mugger says

However, in the case of a law which protects individual rights, you are free to do as you wish, except to violate someone else's rights.

What is the problem with that freedom? Do you wish to also be free to hurt others or take their property? By what right?

[DavidOdden]

Okay, government can make "good" laws and "bad" laws. How would any law not be an initiation of force in the form of coercion?

"Coercion" has no standing in the debate: what matters is the initiation of force. A law is not initiation of force when it is the threat of retaliatory force, which means "if force is initiated, this will be the retaliation". Edited January 4, 2009 by DavidOdden

[JeffS]

If the law doesn't prevent participants in the economy to act within the framework of that economy (to make any voluntary deals they wish to make), then that law does not involve the government into the economy. How does such a law interfere with the behaviour of anyone who is out to make deals?

Again, this is the "if you don't have anything to hide, government spying shouldn't bother you" argument. Imagine an LF economy with no laws - no possibility for government interference. That's our starting point. Now, why would we put laws into that system? Because some might try to control the economy (or at least a small part of it). So, we institute laws whose effect is to say, "If you try to do this, then we will punish you." This is coercion. It exists whether the market continues to operate as LF or not.

While I predict that I'd have no problem proving that LFC in fact means a separation of state and economics, no matter what challenges you bring, I don't think it is constructive to go down this road any further, because in Objectivism the operating principle as far as politics is concerned is in fact not "separation of state and economics".

It is instead the principle of individual rights. While "the separation of state and economics" is a logical consequence of that principle, individual rights are what Ayn Rand derived from her ethics, and it is from that principle that she reached the conclusion that Laissez-faire Cap. is the only moral political system.

It might help to clarify that I have a rational moral code, and believe in laissez-faire capitalism and individual rights. I am not an anarchist, I understand the rational need for a government and a system of laws. I'm having a hard time rationalizing how laws could not be coercion.

[Jake_Ellison]

Putting up a sign in your yard isn't self-defense - it's a threat, or if you prefer, it's a warning. Much like a law.

Now you're telling me that I shouldn't be allowed to state the truth ( on a sign placed on my property), which is that I intend to defent my property and my family.

I'm not concerned with whether laws are rational, what individual rights are, whether they are arrived at rationally or not - because I don't see how these questions apply to the question I'm concerned with: How can law not be an initiation of force?

A law is only initiation of force if it threatens the initiation of force.

However, if it only threatens retaliatory force, then it is not an initiation of force.

If that's all you're concerned with, then this conversation should've been over when David first made this point.

Edited January 4, 2009 by Jake_Ellison

[JeffS]

But both assumptions are false. Respect for individual rights does not come out of thin air, it is the fruit of developing a civilization. The concept "society" implies laws and recognizes the fact that some men live like animals. Those are the initiators of force, and rational men have created societies in response to this savagery where further initiation of force is prohibited by law. You are seeking first causes, well here is his picture and here is his gang. Laws protecting rights in response to such threats, which as you have noted is not initiation of force.

Recall that fact trumps imagination any day: law is necessitated by fact, not imaginary scenario.

So, societies develop with some individuals determining how the rest of the society's members should act, then institutes laws to force that action?

I find hypotheticals help to clarify issues and questions - Ayn Rand herself actually wrote two mammoth books of extended hypotheticals. So, yes fact trumps imagination, but imagination can help us understand facts a little better.

Is a law ever not coercion? Is a law never coercion? What is the distinction?

The first statement is true, the second is false. Laws are not naturally occurring objects like rocks and bananas. Moral principles are man-made -- they are the recognition of man's proper nature in a social context. Without a recognition of the fact, there is no law.

I thought the rest of my post made it clear I wasn't arguing laws exist in nature. Once laws are created, they exist at all times - regardless of whether anyone follows them or not.

[DavidOdden]

I'm having a hard time rationalizing how laws could not be coercion.

I see the point. Coercion is not the same as initiation of force. If we go with the Webster's dictionary definition of "coercion":

to restrain or dominate by force

;

to compel to an act or choice; to achieve by force or threat

then law is a form of coercion, because it achieves compliance with moral law by threating certain consequences. That is the proper function of government. Returning to your initial post:

If laissez-faire capitalism means no government interference,

that is false

Laws are a form of coercion, coercion is a form of force,

that is true, in a so-what sense

therefore government laws interfere in the market

that is false and irrelevant ("lack of interference" is not how you define capitalism).

I find hypotheticals help to clarify issues and questions

Yes, but they have to be plausible. Your hypothetical is entirely implausible, although I could imagine writing a sci-fi novel expanding on those themes.

Once laws are created, they exist at all times - regardless of whether anyone follows them or not.

They do not exist when they are repealed.

[JeffS]

"Coercion" has no standing in the debate: what matters is the initiation of force. A law is not initiation of force when it is the threat of retaliatory force, which means "if force is initiated, this will be the retaliation".

Coercion is force used to make somebody do something against his or her will. If it is someone's will to kill another person, whether that is rational or not, and they don't do it because there is a law against it, then that is coercion. Since the law existed before the person wanted to kill the other, the force began when the government wrote the law.

[Chops]

Is a law ever not coercion? Is a law never coercion?

A law is not an initiation of force when it does not violate rights. For example: one does not have the right to murder, therefore a ban on murder is not a violation of rights, and does not constitute an initiation of force.

A law is an initiation of force when the law itself violates rights, i.e. taxes, regulation.

[JeffS]

I see the point. Coercion is not the same as initiation of force. If we go with the Webster's dictionary definition of "coercion":

to restrain or dominate by force

;

to compel to an act or choice; to achieve by force or threat

then law is a form of coercion, because it achieves compliance with moral law by threating certain consequences. That is the proper function of government.

Coercion is not the same as initiation of force, but it is force. If this force is applied first, before any other force is applied, then it is an initiation of force.

Returning to your initial post:

If laissez-faire capitalism means no government interference,

that is false

Huh?

When I say “capitalism,” I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism—with a separation of state and economics, in the same way and for the same reasons as the separation of state and church. - Ayn Rand, "The Objectivists Ethics", The Virtue of Selfishness

If this doesn't mean "no government interference," then I must be confused about a lot more than I thought.

Laws are a form of coercion, coercion is a form of force,

that is true, in a so-what sense

therefore government laws interfere in the market

that is false and irrelevant ("lack of interference" is not how you define capitalism).

Yes, it is. It's how you define laissez-faire capitalism, and it's how Ayn Rand used the term.

Yes, but they have to be plausible. Your hypothetical is entirely implausible, although I could imagine writing a sci-fi novel expanding on those themes.They do not exist when they are repealed.

"Plausible" as in forming a secret society protected by a futuristic machine which projects a mirage over several hundred square miles, and doors which open not when words are spoken, but when spoken words are sincerely meant?

[DavidOdden]

Coercion is force used to make somebody do something against his or her will. If it is someone's will to kill another person, whether that is rational or not, and they don't do it because there is a law against it, then that is coercion. Since the law existed before the person wanted to kill the other, the force began when the government wrote the law.

For the record, I was mistaken in post 7. I decided it was time to research the term “coercion” to see if it means “necessarily improper”, which it does not. Thus the question of whether a law constitutes coercion doesn't have any relevance to whether capitalism implies anarchy or whether law is by nature improper.

The law against murder is not ad hominem -- it does not say "Bill Smith may not commit murder". It is conceptual, saying "no man may commit murder". That law, specifically the threat to use force against anyone if they do further initiate force by committing murder, exists because of the fact that murder and rights-violations in general do exist and have occurred, and we have reason to believe will occur again, , even if the specific individual Bill Smith has not committed murder

The proper function of government is to regulate the use of force, so that it is only used in self-defense and in retaliation against the initiation of force by another individual. Since the very purpose of government is to use (or threaten) force in an objectively controlled fashion, the fact of using force is not a relevant argument in determining whether a law is proper.

[DavidOdden]

If this doesn't mean "no government interference," then I must be confused about a lot more than I thought.

Agreed. Maybe these quotes from "The Nature of Government" (p. 126) will help:

The necessary consequence of man's right to life is his right to self-defense. In a civilized society, force may be used only in retaliation and only against those who initiate its use. All the reasons which make the initiation of physical force an evil, make the retaliatory use of physical force a moral imperative.

If some "pacifist" society renounced the retaliatory use of force, it would be left helplessly at the mercy of the first thug who decided to be immoral. Such a society would achieve the opposite of its intention: instead of abolishing evil, it would encourage and reward it.

If a society provided no organized protection against force, it would compel every citizen to go about armed, to turn his home into a fortress, to shoot any strangers approaching his door—or to join a protective gang of citizens who would fight other gangs, formed for the same purpose, and thus bring about the degeneration of that society into the chaos of gang-rule, i.e., rule by brute force, into perpetual tribal warfare of prehistorical savages.

The use of physical force—even its retaliatory use—can-not be left at the discretion of individual citizens. Peaceful coexistence is impossible if a man has to live under the constant threat of force to be unleashed against him by any of his neighbors at any moment. Whether his neighbors' intentions are good or bad, whether their judgment is rational or irrational, whether they are motivated by a sense of justice or by ignorance or by prejudice or by malice—the use of force against one man cannot be left to the arbitrary decision of another.

Visualize, for example, what would happen if a man missed his wallet, concluded that he had been robbed, broke into every house in the neighborhood to search it, and shot the first man who gave him a dirty look, taking the look to be a proof of guilt.

The retaliatory use of force requires objective rules of evidence to establish that a crime has been committed and to prove who committed it, as well as objective rules to define punishments and enforcement procedures. Men who attempt to prosecute crimes, without such rules, are a lynch mob. If a society left the retaliatory use of force in the hands of individual citizens, it would degenerate into mob rule, lynch law and an endless series of bloody private feuds or vendettas.

[Chops]

Government exists not to protect against coercion, but to protect against the violation of rights. Coercion does not necessarily constitute a violation of rights, though in most situation it does (you rarely have to coerce someone to not kill). Notice how most of the arguments from the others in this thread use the term "violation of rights", while you keep coming back to "coercion." "Coercion" is not primary, "rights" are primary (within the context of this discussion, of course).

This seems to be the source of the disconnect.

Edited January 4, 2009 by Chops

[Jake_Ellison]

Coercion is force used to make somebody do something against his or her will. If it is someone's will to kill another person, whether that is rational or not, and they don't do it because there is a law against it, then that is coercion. Since the law existed before the person wanted to kill the other, the force began when the government wrote the law.

The world at large doesn't define force the way you do: force is a physical influence that causes an object to change its direction or speed. Coercion on the other hand can mean a million things that don't involve physical force.

Objectivism holds that the initiation of physical force against another man is the equivalent of violating someone's rights, and that this should be forbidden by law. (And no law should initiate force.) Physical force in that statement means the above definition. If you wish, I can prove to you that Objectivism is right in this regard. (And that LFC laws don't initiate force, by this definition.)

Now, if you wish to define force in some other, novel way, and using that definition you wish to make an assertion, I am willing to go along with that, but we'll be in disagreement. You are of course welcome to prove that this yet unstated assertion is right as well, using your own definition, but you cannot claim that I subscribe to your assertion (even if our words are exactly the same), since in your statements force means something other than what is generally accepted, and what I meant when making my statements.

[DavidOdden]

An additional point. When Rand speaks of capitalism in "The Objectivist Ethics" p. 37, saying "I mean a full, pure, uncontrolled, unregulated laissez-faire capitalism", she is directing the reader's attention to actual capitalism, not the miscreant notions discussed in CUI ch. 1. She gives the Objectivist devinition of capitalism on p. 19 of CUI in "What is Capitalism":

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

The lack of government regulation of business is a consequence of this fact about capitalism, the nature of rights, and the proper function of government.

[AndrewRyan]

I was debating with myself how best to solve JeffS' confusion on this subject when I came to the realization of what force/coercion is. I thought about what rights are, and i know rights are anything that I can freely do WITHOUT interfering in another individuals rights. For example, I have a right to live, as my existence does not prevent another individual from existing. I conclude that an initiation of force/coercion is anything that violates a RIGHT. I can then conclude that laws in an LFC system are NOT force or coercion as they do not violate rights.

Then, I reasoned that no matter how much a person claims the existence of laws constitutes force/coercion is irrelevant. This argument is irrelevant because no LFC law violates any individuals right.

Claiming that this argument is the same as the "if you have nothing to hide" argument is false. Individuals do have privacy rights and government spying in the form of a law would constitute as exercising force/coercion against an individual's rights.

The only conclusion is that laws in an LFC system are not an initiation of force/coercion. To continue claiming that they are is to say that murder/mugging/fraud/theft/rape/what have you are all rights. As I mentioned those cannot be rights as an individual cannot murder/mug/fraud/steal/rape/what have you WITHOUT violating another individual's rights.